In Michael Lewis's game-changing bestseller, a small group of Wall Street iconoclasts realize that the U.S. stock market has been rigged for the benefit of insiders. They band together―some walking away from seven-figure salaries―to investigate, expose, and reform the insidious new ways Wall Street generates profits. If you have any contact with the market, even a retirement account, this story is happening to you.
My Book Review
Wow, I loved this book. As someone who is just getting into books about Wall Street, I never expected to be so engaged with one. This is by far my favorite recent book! Right of the bat, Lewis keeps the reader engaged by describing the value of a millisecond on Wall Street. I've never read a book that says the word millisecond more, but I've also never been more intrigued by the thought of a millisecond either.
After explaining the value of time in trading and the critical placement of exchanges to high-frequency traders programming, Lewis dives into Brad Katsuyama's trading failures at RBC Capital Markets. Katsuyama struggled with trading as the playing field was being skewed to benefit front-runners. Meaning small share bids (i.e. 100 share bids) would penny up in front of actual trading programs, like they did for Katsuyama. Once large volume orders developed, bids and offers dissipated. This allowed high frequency traders to gather information from potential buyers and then position themselves in front of them, hence front running.
Katsuyama didn't let this issue go over his head, like most workers on Wall Street who apparently know nothing about how trading precisely operates did. Computer programs to people on Wall Street were like aliens to humans. They just had no clue what was going on. Katsuyama, on the other hand, put together a team to develop THOR, an order-routing system that allows buyers to stay ahead of front-runners. THOR slowed down a brokers' order so it arrived at the stock exchange simultaneously and effectively ruined the opportunity to front-run. Later, Katsuyama furthered his pursuit of uncovering conflicted exchange practices by starting IEX, a stock exchange designed to promote ethical trading practices and mitigate the negative impact of dark pools.
By exposing that rigged equity trading was in favor of electronic trading hedge funds, Lewis embarked an incredible non-fiction book that incorporates a feeling of fiction through his intrinsic mastery and detailing of the insidious ways Wall Street generates profits. The entire book made me feel entrapped within a really good story, making the truth of the matter even more unbelievable! What an incredibly written and thought-provoking book! I recommend this book for anyone interested in the inner-workings of Wall Street.
Xoxo,
Everything I Want
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